Canadian Dollar Update – Canadian dollar spinning its wheels

• FOMC minutes are dovish-as expected
• Gaza ceasefire announcement improves risk sentiment, marginally
• US dollar traded higher overnight but eased into NY open

USDCAD open 1.3948, overnight range 1.3933-1.3964, close, 1.3954, WTI 62.34, Gold 4038.44

The Canadian dollar traded quietly and remains trapped in the range that has contained price action for two weeks.

WTI oil drifted in a 61.81–62.87 range and is trading at 62.16 in NY. Traders are hoping that the Israel/Hamas ceasefire reduces the risk of oil supply disruptions.

The FOMC minutes were essentially dovish with policymakers expecting to continue to cut rates this year.  Markets will be watching Fed Chair Jerome Powell’s pre-recorded remarks at a community banking conference today for any additional clues about policy direction.

Asian equities mirrored Wall Street’s positive tone overnight. Japan’s Topix gained 0.68%, the ASX 200 added 0.25%, while Hong Kong’s Hang Seng slipped 0.29%.

As of 7:30 am EDT, European markets were mixed: the CAC-40 rose 0.20%, the DAX 0.33%, and the FTSE 100 fell 0.38%. S&P 500 futures were flat. The US Dollar Index hovered near 98.95  and the 10-year Treasury yield sat at 4.122%.

EURUSD drifted between 1.1603 and 1.1649 as traders weighed ongoing French political tensions and weaker German trade figures. Narrowing OAT/Bund spreads offered minor support ahead of the ECB’s minutes later today.

GBPUSD traded choppily in a 1.3343–1.3420 band, last near 1.3389 in early New York. BoE official Catherine Mann reiterated her view that policy should remain tight to rebuild consumer confidence by forcing inflation lower.

USDJPY moved within 152.41–153.22 as the yen stayed under pressure following the election of Sanae Takaichi as Japan’s prime minister. Her belief that the government should direct both fiscal and monetary policy unsettled markets and kept short-dollar positions under strain.

AUDUSD held a mild bid, fluctuating between 0.6570 and 0.6611. Consumer inflation expectations for October edged up to 4.8% from 4.7%, giving the currency a modest lift as traders reasoned the data supported the RBA’s case for keeping rates unchanged.

Ther are no economic reports today.